Crude oil rose for the first time in three sessions after the International Energy Agency forecast lower supply from producers this year.
Production through June from countries outside of OPEC will fall by 330,000 barrels a day, or 0.7 percent, from December levels, the agency said. The forecast signals that OPEC has succeeded in convincing non-OPEC producers to follow through on an agreement made last month to lower supply, analysts said.
"OPEC compliance will not be 100 percent by any means, but they are defiantly cutting production," said William Brown, president of WH Brown & Co, an oil consultancy in New York.
"Non-OPEC production will be lower than the IEA predicts because of the depletion of many mature fields."
Crude oil for February delivery rose US$0.03 to US$18 a barrel on the New York Mercantile Exchange. Prices still were down 8.5 percent this week and have dropped 41 percent from a year ago, as recession weighs on demand. The exchange closed early today and will be shut Monday for the Martin Luther King holiday.
In London, Brent crude oil for March settlement rose 4 cents to US$18.45 a barrel on the International Petroleum Exchange. Prices fell 7.4 percent this week.
Independent producers Russia, Norway, Mexico, Oman and Angola pledged to limit daily supplies by a combined 462,500 barrels.
Russia has pledged 150,000 barrels of that reduction, though it committed to trim exports only through March. The Russian export pledge may be short lived. AO Yukos Oil Co, the nation's second-largest producer, said it plans to boost output 21 percent this year and hopes the government will end its participation in the agreement with OPEC.
"We still aren't sure what Russia will do," said Ric Navy, a broker at BNP Paribas Futures Inc in New York. "They could ruin things for OPEC."
Norway's oil minister, Einar Steensnaes, said Russia's decision to lift restrictions on fuel oil exports earlier this month may weaken the supply agreement. Norway is the third-largest crude oil exporter.
"If the market is provided with products that are related to the same production, then the effect of the production cuts will be weakened," Steensnaes said.
Steensnaes also said Norway, which pumped close to 3.2 million barrels a day before the output cuts, "won't just tag along behind OPEC" in its decision-making.
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